Cooperatives and Contracting in Agriculture: The Case of West Liberty Foods, October 2005

The West Liberty Foods turkey cooperative was formed in 1996 to purchase the assets and assume operations of Louis Rich Foods (an investor-owned processing rm), which, at the time, announced the imminent shutdown of its West Liberty, Iowa, processing facility. We study the creation and performance of this �new generation� cooperative using eld interviews with grower members and company management. We describe changes, before and after the buyout, in the contractual apparatus used for procuring live turkeys, and in the communication requirements, work expectations, and nancial positions of growers. During the private ownership period, most of the inputs (except labor and facilities) were provided by the rm; there was substantial supervision of the growers' actions; growers faced little price and production risk; and growers' equity was due largely to ownership of land and other farm assets. Our interviews reveal that, after cooperative formation, growers were exposed to considerable additional risk; monitoring of growers by the rm was less intensive; grower time and effort commitments to turkey production increased substantially; and a signicant fraction of rm (cooperative) equity came from growers' willingness to leverage their farm and personal assets (and hence indirectly their existing relationships with local lenders). We argue that some of these changes are consistent with a nancial contract where asset pledging and its corollary risk generate higher work effort by growers and a reduction in agency rents. These economies likely compensate for an organizational deadweight loss traditionally associated with cooperative governance.

State Legislation Monitoring Report FY2004, February 2005

The Division of Criminal and Juvenile Justice Planning issued its first state legislation monitoring report in February 2002, covering the first six months’ impact of Senate File 543 (which enacted a number of sentencing changes) on the justice system; monitoring of the correctional impact of this bill was at the request of several members of the legislature. Since then, the Criminal and Juvenile Justice Planning Advisory Council has requested that CJJP monitor the correctional impact of enacted legislation of particular interest. This report covers monitoring results or future plans to monitor the following: 1. Changes in “crack” cocaine and “powder” cocaine penalties under Chapter 124.401 (effective FY2004; see p.3). 2. Commitments to prison involving manufacture, distribution, or possession of methamphetamine under Chapter 124.401 (see p.5). 3. Prosecution of offenders for child endangerment under Chapter 726.6(g) for permitting the presence of a child or minor at a location where a controlled substance manufacturing or a product possession violation occurs (see p.7). 4. Provision of an enhanced penalty for manufacturing of controlled substances under Chapter 124.401C when children are present and the offender is not charged under section 726.6(g) (see p. 7). 5. Creating a new offense when a retailer sells more than two packages of any product containing pseudoephedrine (chapter 126.23A) and providing for an enhanced penalty under Chapter 714.7C when a theft involves more than two packages of similar products (see p.8). 6. Establishment of parole eligibility at 70% of time served for persons sentenced under the “85% law” provisions of Iowa Code Section 902.12. (effective FY2005; see p. 9).